Joseph Schumpeter famously observed that capitalism unleashed “creative destruction.”[i] If that is so for American journalism, just such a wave has, without doubt, been destroying local newspapers. What’s not yet clear is whether such destruction will be complemented by creation. The result matters not just as it affects a select group of business enterprises. Arguably, local journalism profoundly affects “social capital”—the ties that bind communities together and help lead to trust and prosperity.

A new AEI report “Could News Bloom in News Deserts?”[ii] highlights reasons for both concern and optimism about the future of local journalism, which communities need in order to learn about the activities of local government, community organizations, and religious institutions—the sinews of social capital. Even basic coverage of high school sports, which may inspire celebration over the defeat of a traditional rival, builds the sort of fellow feeling that strengthens social capital.

Between 2004 and 2019 alone, the country lost 2,100 newspapers: a fourth of the total within 15 years.[iii] That decline was matched, or indeed worsened, by a hollowing out of the staffs at remaining news operations. The US Bureau of Labor Statistics finds that employment in newspaper publishing declined from 455,000 employees in 1990 to just 137,220 in 2019—approximately a fourth of the 1990 level. According to a census conducted by the American Society of Newspaper Editors, the number of employed journalists declined from 55,700 in 1990 to 23,030 in 2019, a change of over half. The difference is even starker in terms of population: In 1990, there were 22 journalists per 100,000 people in the US, while in 2019, that figure dropped to just seven.[iv] Major newspapers such as the New York Times and Wall Street Journal have adapted and thrived, but local newspapers, some of which had operated for more than a century, have shut their newsrooms.

Long reliant on local advertising that has been scooped up by competing websites, local newspapers (for example, the Vindicator in Ohio and the Carter County Times in Kentucky) do much more than provide a venue for supermarket coupons. Historically, their bread and butter has been coverage of local government, providing accountability for public officials and the information citizens need to make democracy work. But they provide for social capital as well. Even such seemingly mundane matters as local events calendars, photos of 4-H fairs, and obituary notices reinforce the ties that bind communities together. If a school play happens without a review in the local newspaper, students have been, on some level, cheated of recognition—and adults are unaware of the need for volunteers.

The collapse of the advertising-based business model for local news makes its survival an open question. “Could News Bloom in News Deserts?,” however, provides some positive findings. As the report points out, although public attention has been focused on newspaper closings, data from the Northwestern University Medill School of Journalism Local News Initiative show that since 2017, 112 local newspapers or online news sites have been established.[v] AEI distributed a nine-question survey to all of them. The 27 completed surveys provide reasons for both hope and concern.

On the positive side, a variety of business models have emerged. These include for-profit sites and papers such as the Appalachian News-Express, which relies on not only advertising but other revenue sources, including real estate rentals, and print operations that serve other local enterprises. Others, however—such as Cardinal News in southwest Virginia and the New Bedford Light in southeastern Massachusetts—use a nonprofit model that allows them to receive grants from local community foundations and major businesses. Still others have forged partnerships with college journalism programs to provide internship opportunities and local public radio stations, themselves in need of local reporting.

At the same time, many of the local news startups, such as the Asheville Advocate, rely on volunteer labor, which may not prove sustainable. Others, such as the Bowie Sun in Maryland, are one-person operations, raising the same concern.

The stakes are high for those who care both about the health of the American federalist system—reliant on an informed local citizenry—and those concerned about the social capital of local communities.